China: BMW wants to boost local engine production

Although still impaired by the laws on foreign ownership, all brands expand capacities in the country, as China is now the world’s biggest car market. BMW now plans to upgrade its engine capacity here to move closer to its Audi opponent.

The German luxury maker, the world’s biggest premium automaker, along with its local partner, Brilliance China Automotive Holdings will have a new facility in Shenyang, where they strive to build as much as 400,000 engines a year – potentially doubling capacity in China.

The problem for BMW is that on the Chinese market it’s actually behind Volkswagen’s Audi. Expanding its engine production capacity would allow the carmaker to decrease shipping costs and skip taxes on imports, while also lowering the risk of exchange rate fluctuation.

The new manufacturing plant located in Shenyang’s Tiexi district would be set next to an already existing car assembly facility, would start production from 2016, with an initial output of 200,000 engines a year – four-cylinder gasoline for the locally built cars.

As capacity would go up to 300,000 units on the medium term and eventually top out at the full 400,000 figure, the engine production expansion would keep pace with the plans to increase production of cars in China – BMW wants to jump from 200,000 to 400,000 vehicles in a short period.